Explain the term equivalent nominal annual rate (ENAR),?

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: What is the Equivalent Annual Operating Cost?

A: Equivalent annual cost (EAC) is the yearly expense of owning, managing, and operating an asset over…

Q: Who uses the original base period for the CPI index?Give an example?

A: CPI is the abbreviation used for the consumer price index. The combined weighted average value of…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: Explain the term Annual Effective Yields?

A: Annual effective yield: Annual effective yield is defined as the simple rate of interest that gives…

Q: Is the Compounding Period equal to Payment Period? When does this situation arise?

A: Compounding period is period by which the interest is paid or added to the principal. Payment period…

Q: a) Find aggregate planned expenditure for each level of real GDP. b) What is the equilibrium level…

A:

Q: e present value annuity factor

A: An annuity factor is a process of determining the amount which can be withdrawn initially from the…

Q: Is the Compounding Period Equal to Payment Period?

A: Compounding period refer to the number of times the interest is paid on the amount deposited or the…

Q: s. What is the geometric average return for this time period?

A: Geometric Average: It is the average return for a set of values computed with the products of the…

Q: Present using the rate of return method (ROR) with the formula. If the NPV is used to determine the…

A: Here, Net Cash Flow is  31250 Rate of Interest is 10% Initial Investment is 100000 NPV is 18462…

Q: What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a…

A: Internal Rate of Return: It is the rate that makes the project/investment net present value equal…

Q: Match each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a…

A: Solution:- Net Present Value (NPV) means the net present value of cash inflows after the deduction…

Q: Write the discounting formula for the Conversion from Actual to Constant Dollars?

A: Introduction Inflation is a major reason for conversion of actual value to Constant Dollar value.…

Q: Explain APY (annual percentage yield)?

A: APY (Annual Percentage Yield):   It is the real return rate that is earned on an investment during a…

Q: What was her dollar-weighted annual yield rate? Compute it exactly, and compare to using the…

A: Dollar weighted annual rate is that rate of return where present cash inflows are same as present…

Q: What should be multiplied to the quantity of final products of the current year if we want to…

A: National income at constant prices: If goods and services produced in a year are valued at fixed…

Q: What will be the Net interest income variation for the cumulative GAP, if interest rates have a 1%…

A: The potential loss from unexpected changes in interest rates can significantly alter a bank’s…

Q: What security provides a good estimate of the long-term nominalrisk-free rate?

A: Risk-free Rate is the estimation of the rate that is earned on the securities or the investments…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: How is the Compounding Period equal to Payment Period? Give an example?

A: The annual payment of $7,000 and compounding is to done semi-annually then compounding period 2 will…

Q: Define the terms annual percentage rate (APR), effective annual rate (EFF%), and nominalinterest…

A: The term “annual percentage rate (APR)” refers to the annual rate of interest charged to borrowers…

Q: a. Pay-back period b. Discounted Pay-back period c. Internal Rate of Return (IRR)

A: Payback period is the period within which the sum invested by the company in a project will be…

Q: What is the Net Interest Margin (NIM)

A: Net Interest margin (NIM) is percentage of difference between interest income earned on loans and…

Q: Give an example on annual rate of return method

A:

Q: Calculate the dollar-denominated returns for each scenario. should be indicated by a minus sign.)

A: Exchange rate(ER) is that rate at which national currency can be valued in terms of foreign…

Q: How much is the equivalent annual cost of Model X?

A:

Q: Find the total number of compounding periods and the interest rate per period for the investment.

A: Effective interest rate is also called as effective annual interest rate. It is the real return of…

Q: Select all of the time value of money factors that are known in a NPV assessment O Present value of…

A: npv : IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOW AND PRESENT VALUE OF CASHOUTFLOW.

Q: Calculate the Payback period, Accounting Rate of Return and the Net Present Value (using a 17%…

A: Given:

Q: Create a chart reflecting the convention payback period?

A: The chart is presented below:

Q: Define the term Annual operating cost:?

A: MEANING OF OPERATING COST The sum total of operating expenses and cost of goods sold is called…

Q: What is the difference between cumulative return and annualized return/CAGR). Provide an example

A: There are two methods to measure the rate of return annual basis and cumulative basis.

Q: Explain with an illustration the technique of ratio annualization   and why it might be needed

A: Annualized Rate is that rate of return which is less than one year but it is computed as if the rate…

Q: Is a cap rate the same as an IRR? Which is generally greater? Why?

A: The capitalization rate or cap rate cant be considered as similar to the IRR or the internal rate of…

Q: What is the Total equivalent annual cost?

A: Equivalent annual cost (EAC) is the annual cost of claiming, overseeing, and supporting an asset…

Q: Annual equivalent cost (AEC),

A: The Annual Equivalent Cost (AEC) is the annual cost of acquiring an asset over its entire life. The…

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: How can we apply Annual-Worth Analysis for the calculation of Unit-Profit or Unit-Cost Calculation?

A: Annual worth analysis is an analysis of value of an investment on an annual basis. It measures the…

Q: Which figure of merit provides an interest rate at which the present value of the future cash flows…

A: IRR It is a rate at which the amount of investment equals to PV of the future CF. It is a…

Q: In a period of inflation, which cost flow method produces the highest net income? O FIFO method O…

A: There are various methods for determining the ending inventory and cost of goods sold. Some of the…

Q: What is the difference between the regularand discounted payback periods?

A: The Regular Payback period is one of the capital budgeting techniques. It refers to the time period…

Q: Define each term and state three characteristics for each term a- Pay-back period b- Discounted…

A: a. Pay-back period: The payback period is the length of time required to repay the cost of an…

Q: Which of the below statements refers to the concept of deferred payment? a. It is the original…

A: Temporary delay in the payment completely or partially is called deffered payment.

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.